ESMO Executive Summary Q2 2026

Q2 2026

U.S. Energy Storage Market Outlook seia.org | benchmarkminerals.com

Disclaimer

Q2 2026 U.S. Energy Storage Market Outlook

All information, pricing and production data within this publication has been obtained directly by Benchmark Mineral Intelligence Ltd in accordance with Benchmark’s internal methodologies which can be viewed on Benchmark’s website.

Secondary data has been obtained from various sources which are believed to be reliable and have been referenced accordingly. Estimations and forecasts have been highlighted where appropriate.

The content provided is the independent opinion of Benchmark Mineral Intelligence Ltd and has been supplied solely for education and information purposes.

Benchmark Mineral Intelligence Ltd is not an investment advisor, financial advisor or securities broker and subsequently withholds any liability for losses or damages incurred either directly or indirectly.

The information provided herein is 'as is' and the authors/company make no warranties, express or implied, regarding its accuracy, completeness, or fitness for a particular purpose.

All data reported in GWh/GW, MWh/MW, all prices reported in U.S. Dollars (USD) unless otherwise stated.

To purchase the full report, please visit Benchmark's website here.​

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Introduction to the Report Table of Contents

Q2 2026 U.S. Energy Storage Market Outlook

Benchmark BESS analyst team

SEIA Research and Storage Team Emily Burlinghaus, Director of Energy Storage Manufacturing & Supply Chain

Section 1

Executive Summary

4

Iola Hughes, Head of Research

Section 2

Utility-scale

12

Shan Tomouk, BESS & Energy Research Lead

Section 3

Residential

27

Pete Tillotson, Senior Analyst – BESS

Section 4

Commercial & Industrial and Uninterruptible Power Supply

31

Section 5

Supply Chain, Trade, & Manufacturing

37

Section 6

Alternative Chemistries & LDES

45

Section 7

Forecasts

49

Key terms & glossary

54

Calvin Xu, Analyst – BESS

Forrest Levy, Senior Solar and Storage Analyst

Varnika Agrawal – Senior Battery Analyst

Tyler Thompson, Manager of Research Colin Smith, Director of Research Justin Baca, Vice President of Markets & Research

Media contacts Benchmark press@benchmarkminerals.com

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Joan White, Senior Director of Storage & Interconnection Policy

SEIA rskaar@seia.org

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Q2 2026 U.S. Energy Storage Market Outlook

S EC TI O N

Executive Summary

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BESS market update and outlook In Q1 2026, just under 10 GWh/6.77 GW of battery energy stationary storage (BESS) entered operation across the utilityscale and behind-the-meter (BTM) markets, a y-o-y increase of 32% (GWh). The utility-scale market continued to underpin growth with 7.8 GWh/1.5G W installed, with six states bringing more than 500 MWh of new capacity online across all sectors.

The tariffs applied to imported BESS cells and systems continued to evolve in the first quarter, following the Section 301 increase from 7.5% to 25% that came into force in January. The previously enforced IEEPA tariffs were ruled unlawful by the Supreme Court in early March. President Trump subsequently enacted Section 122 tariffs on all nations, which can be in place for a maximum of 150 days (~July 2026).

In March, the US Trade Representative (USTR) announced two new Section 301 investigations targeting 60 different US trading partners. Imports from these trading partners comprised more than 99% of US imports in 2025. Additionally, the AD/CVD case on anode active materials was dismissed.

The full Energy Storage Market Outlook report covers analysis of state VPP programs, federal policy developments, domestic manufacturing build-out, and the emergence of ultra-longduration energy storage projects being announced for the data center industry.

Q2 2026 U.S. Energy Storage Market Outlook

U.S. BESS annual installed capacity outlook by market segment, GWh GWh 70

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Utility-scale

66 +29%

BTM 60

58 +67%

50

45 40

30

27

20

10

0

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+14%

2023

2024

2025

2026F

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Quarterly market snapshot – Utility-scale & behind the meter

Q2 2026 U.S. Energy Storage Market Outlook

Q1 2026 saw BESS deployments of just under 10 GWh, up 32% compared to Q1 2025. The utility -scale market accounts for over 75% of deployments, as

developers continue to see growing markets in capacity, energy arbitrage, and long-term contracts. As data centers and other BTM applications grow in the coming years, we expect this segment's share of the market to grow to 20% by 2030.

Quarterly deployments by market segment, GWh

Q1 utility-scale capacity additions by paired resource by GWh

GWh 20

-45%

Grid

18

BTM

Standalone

Solar

62%

38%

18

14

Q1 number of utility-scale projects installed by capacity 10

10

0

46

16

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Q1 26

Q4 25

Q3 25

Q2 25

Q1 25

Q4 24

Q3 24

Q2 24

Q1 24

Q4 23

Q3 23

Q2 23

0

Q1 23

27

0-49

1

2

50-199

200-499

500-999

1,000+

Total

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Residential BESS decreases 35% from Q4

Q2 2026 U.S. Energy Storage Market Outlook

Residential BESS deployments in Q1 2026 reached 515 MWh across the U.S., representing a 28% decrease compared to Q1 2025. This initial contraction will likely continue as the market adjusts to the end of the 25D tax credit. Some projects originally slated for Q1 2026 are likel y to have been pulled forward into Q4 2025 to take advantage of the expiring tax credit.

Given the ongoing energy shock across international markets, electricity prices are once again rising, which gives reason to improve the outlook for residential batteries due to improved economics. Tax credit and incentive scheme removals often exhibit sharp but temporary downward impacts on deployments. Looking ahead, we expect continued recovery out to 2030 in the residential storage market.

Quarterly residential BESS deployments, U.S.

Annual Residential BESS installations, 2023-2026F

MWh

MWh

1,000 780

800

827

578

330

387

444

413

+44%

2,500

619 515

454

-37% 3,215

3,000

795

717

600

400

+56%

3,500

2,063

2,000 1,500

2,024

1,433

1,000

200

500 0

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Q3 2023

Q4

Q1

Q2 Q3 2024

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Q4

Q1

Q2 Q3 2025

Q4

Q1 2026

0

2023

2024

2025

2026F

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C&I to be driven by data centers

Q2 2026 U.S. Energy Storage Market Outlook

Data center growth in the U.S. is leading to a variety of energy storage approaches from facility developers. In addition to the previously-seen LFP BESS deployments for peak shaving use, Google and Meta are deploying ultra-long-duration energy storage (LDES) to secure 24/7 carbon-free power for their data centers. Google announced plans to install a 30 GWh iron-air system in partnership with Form Energy in Minnesota, while Meta has reserved up to 100 GWh of capacity using Noon Energy’s reversible solid oxide fuel cell technology. These systems provide 100+ hours of discharge, enabling these facilities to maintain critical uptime during multiday renewable energy lulls. Other data centers will continue to opt for a multi -stage battery approach, with lithiumion systems in use for peak shaving outside the facility, and high-power UPS systems within the data center manage load swings.

Quarterly C&I BESS deployments, U.S.

BTM BESS installations – C&I and UPS applications, 2024-2026F

MWh

34.46

GW

1,000

GWh

916

785

800

648 600

400

516 362

351

339

442

387

497

497 419 8.10

200

0

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6.85

3.97

Q2

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Q3 2023

Q4

Q1

Q2 Q3 2024

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Q4

Q1

Q2 Q3 2025

Q4

Q1

C&I

UPS

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BESS manufacturing & technology trends

Q2 2026 U.S. Energy Storage Market Outlook

BESS outlook by battery type

Manufacturing updates This quarter’s manufacturing spotlight focuses on Ford’s announcement to pivot to energy storage through its new subsidiary: Ford Energy. The new company, which will make use of Ford’s existing manufacturing facilities, aims to deploy 20 GWh annually, with initial deliveries starting in 2027.

In April, Chinese cell major Envision AESC announced the sale of a controlling stake in its nameplate 10 GWh LFP factory to Fixx Energy, an American company. Production at the facility had been on hold whilst Envision AESC sought a resolution to difficulties arising from the PFE rules restricting tax credits.

Envision will continue to serve as technology partner at the site.

Ultium Cells announced a $70 million investment to retool its Spring Hill, Tennessee facility to produce lithium-iron phosphate battery cells for energy storage systems. The company operates as a joint venture between General Motors and LG Energy Solution. Production is scheduled to begin in the second quarter of 2026, and the completed cells will be supplied to LG Energy Solution-Vertech for use in grid-scale and artificial intelligence data center applications.

GWh 80

60 40

Lithium ion

Sodium ion

Flow batteries

Other

Lead acid

57.6

44.5

65.5

26.7

20

0

2023

2024

2025

2026F

Annual installed capacity BESS by anode GWh

80

Natural

LTO/Nb Oxides

Synthetic

Hard Carbon

60 40

Other Anode 57.6

44.5

65.5

26.7

20 0

2023

2024

2025

2026F

Li-ion BESS outlook by cathode type GWh 80 60 40

LFP

NMC

NCA

Other

43.3

56.3

63.6

25.4

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2023

2024

2025

2026F

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Key policy updates

Q2 2026 U.S. Energy Storage Market Outlook

Nebraska advanced bill LB1010 establishing a clearer framework through which energy storage development can take place

Section 301 tariff increase, IEEPA ruled unlawful Starting on January 1, 2026, the China Section 301 tariff increases on non-EV lithium-ion batteries from 7.5% to 25%, resulting in a 48.4% overall tariff rate. In March, the Supreme Court ruled the IEEPA tariffs were unlawful, requiring reimbursements. A subsequent Section 122 10% tariff has been imposed for 150 days.

One Big Beautiful Bill Act Utility-scale storage tax credits were preserved, unlike the early end to solar and wind, while FEOC restrictions were tightened. The 45X and 48E tax credits for storage were preserved, and FEOC restrictions were introduced. Changes to MACR's removes accelerated depreciation for storage. 25D residential tax credit terminated after 2025 |

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Treasury signals forthcoming FEOC rulemaking Treasury statements and requests for comment confirmed that detailed FEOC implementation rules would follow. No new restrictions applied yet, but procurement strategy and manufacturing investments changed immediately.

April

2026

August

July

Illinois enacted the Clean and Reliable Grid Affordability (CRGA) Act, which aims to deploy 3 GW of energy storage by 2030.

March

DOE directs FERC to initiate ruling on large loads In October, the DOE sent a letter to FERC under Section 403(b) directing FERC to initiate rulemaking for “ensuring the timely and orderly interconnection of large loads”.

2025

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January

June

Tariffs

New Jersey the NJBPU approved the first phase of the Garden State Energy Storage Program (GSESP), designed to deploy 2 GW of storage by 2030.

January - March

Federal policy State policy/target

October

The U.S. policy landscape for BESS over the last 12 months has been a balancing act between domestic manufacturing ambitions, immediate grid needs and energy security. Though final guidance regarding the precise methodology for Material Assistance Cost Ratio (MACR) calculations has been a gradual process, we have seen a plethora of announcements from states to codify the importance of energy storage by announcing targets and incentive structures. Given the expected load growth across U.S. grids being driven by industries such as AI, we expect more of these announcements in future.

Virginia passed procurement requirements of over 20 GW for utilities, including strong mandates for long-duration and distributed storage.

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Key terms & glossary Energy:

BESS - Battery Energy Stationary Storage RES - Renewable Energy Source VRE - Variable Renewable Energy DSR - Demand Side Response DSM - Demand Side Management LCOE – The Levelized Cost of Energy/Electricity BTM – Behind the meter

Battery:

LTO - Lithium–Titanate LFP - Lithium Iron Phosphate LMNO – Lithium Manganese Nickel Oxide LMO - Lithium Manganese Oxide NMC/NCM - Lithium Nickel Manganese Cobalt Oxide NCA - Lithium Nickel Cobalt Aluminum Oxide LCO - Lithium Cobalt Oxide VRFB - Vanadium Redox Flow Battery Na-ion – Sodium ion

Other Storage types:

CAESS - Compressed Air Energy Storage System FESS - Flywheel Energy Storage System PHSS - Pumped Hydro Storage System TESS - Thermal Energy Storage System

General:

RHS – Right hand side LHS – Left hand side YTD – Year-to-date y-o-y – Year-over-Year seia.org

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Q2 2026 U.S. Energy Storage Market Outlook

Terminology:

Rated Power Capacity [GW/MW] - how much power can flow in/out a battery at a given time Energy Storage Capacity [GWh/MWh] - how much energy can be stored Storage Duration [hour] - amount of time storage can discharge at its power capacity before depleting its energy capacity Round-trip efficiency [%] - the quantity of electricity which can be recovered as a percentage of the electricity used to charge and discharge the device.

Notes on battery chemistry classifications:

The chemistry classifications used in this report are designed to provide representative coverage of the total market, while still being broad enough to facilitate a useful comparative analysis between categories.

It should be noted that within categories there is significant variation in the actual chemistry and material mix. In addition, different chemistry cathodes are often blended in order to achieve certain performance or cost parameters for a given projects.

The classifications used in this report are below, along with subcategories included in each broader grouping. These groupings are open to review as new chemistries become more dominant.

Cathode:

LFP, LMO, NCA, NMC111, NMC523, NMC622 (includes NMC613, NMC712), NMC811 (includes NMCA), Other (includes Lithium Sulphur, Metal Air and other early stage technologies) See here for our disclaimer and sources

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Key terms & glossary

Q2 2026 U.S. Energy Storage Market Outlook

Energy storage: The capture of energy produced at one time for use at a later time. Storage involves the conversion of energy from a form that is difficult to store to a form that is more convenient or economical to store for a longer period of time. Storage technologies can be the following:

Batteries

Rechargeable batteries range in size from button cells to MW grid-scale, and store energy in an electrochemical cell.

Battery chemistries include lithium-ion, lead acid, sodium based and nickel based. Flow batteries operate by passing a solution over a membrane where ions exchange to charge or discharge the cell.

Hydropower

The oldest form of energy storage, it currently accounts for over 90% of the global energy storage capacity. Stores energy by using off-peak electricity to pump water from a lower reservoir to an upper reservoir, and recovers energy at peak times by turbine generation when the water flows back to the lower reservoir.

Flywheel

Stores energy in the form of rotational kinetic by accelerating a rotor/flywheel to a very high speed, added energy increases the speed, extracted energy decreases the speed.

Compressed Air

Stores energy in an underground structure or an above-ground system, by running an electric motor to compress air at times of low demand and then releasing it through a turbine to generate energy at times of high-energy demand.

Sensible heat

The temporary storage of energy in the form of heat, utilizing the sensible heat of a material, materials can be stored in contained aquifers, geological features like bedrock or old mines with the heat or cold from the material used months to years later.

Latent heat

Latent heat storage works by the transfer of heat to or from a material to change its phase, e.g. a steam accumulator utilizing the phase change of water from liquid to gas.

Chemical

Hydrogen

Stored hydrogen is a form of energy, it can be used to produce electricity via a hydrogen fuel cell through the process of electrolysis. Hydrogen can either be produced in situ or produced elsewhere and delivered.

Other

Other

There are many other technologies in use, being explored and developed, including capacitors. chemical storage, superconducting magnets, solid mass-gravitational storage, cryogenic thermal and biological storage

Electro chemical

Mechanical

Thermal

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Key terms & glossary

Q2 2026 U.S. Energy Storage Market Outlook

Utility-scale and BTM ESS • Energy Stationary Storage (ESS) applications can be split into two broad categories, with the BTM market further classified into two broad markets: • Utility-Scale, storage connected to distribution or transmission networks, or in connection with electricity generation.

• Front-of-the-meter distribution connected (Middle Market), systems 1-20 MW (2-4 MWhs) connected to the distribution grid used for peak shaving, renewable integration, avoided distribution grid upgrades, and grid support.

• Behind the meter (BTM), storage interconnected behind the utility meter of commercial, industrial or residential customers, p rimarily aiming at electricity bill savings, and energy resiliency.

ESS Utility-scale

Standalone

Distribution networks

Transmission networks

Renewable / generation paired

BTM

Residential

Commercial & Industrial

Generation pairing

Generation pairing

Back-up power,

Back-up power Microgrids EV DC fast charging UPS for Telecoms & Data centers

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